ISO New England proposes greater oversight of transmission investments

As New England’s transmission infrastructure continues to age, regulators and market stakeholders are increasingly focused on how projects to replace or refurbish existing assets are reviewed, planned and funded. ISO New England has filed a proposal with the Federal Energy Regulatory Commission that would establish a new independent review process for asset condition transmission projects. For brokers and customers, greater oversight of these investments could improve transparency around regional transmission planning and provide important context on the infrastructure costs that may ultimately be reflected in electricity rates. Michael Wirkus, Senior Channel Partner Manager at SmartestEnergy, shares an update on the proposal, what it could mean for the New England energy market and why he believes earlier independent review could benefit the region.

Understanding asset condition projects
Asset condition projects replace or refurbish transmission equipment that has deteriorated, become obsolete or reached the end of its useful life. These investments play an important role in maintaining the safety and reliability of the power system.

New England’s transmission owners have historically identified the need for these projects, developed the proposed solutions and determined whether to proceed. ISO New England tracks the projects and reviews certain potential system impacts, but it does not independently determine whether a project is needed or whether the proposed solution represents the most efficient approach.

With transmission owners expecting to add approximately $5 billion in asset condition projects through 2034, state officials, consumer advocates and market stakeholders have called for additional scrutiny. Their concerns are not necessarily about whether aging equipment should be replaced, but whether the scope, timing and cost of each investment receive sufficient independent evaluation before customers are asked to pay for it.

How the proposed process would work
Under the proposal filed with FERC, ISO New England would review individual asset condition projects and examine the broader asset management programs used by transmission owners.

The review could assess the condition of existing equipment, the justification and timing for an investment, the proposed scope and estimated cost, and the alternatives considered by the transmission owner. It could also identify differences in asset management practices and opportunities to coordinate the work with other regional transmission needs.

ISO New England would then present its findings to the Planning Advisory Committee, providing states, consumer representatives and other stakeholders with an independent technical perspective earlier in the project development process.

The proposal received unanimous stakeholder support before being submitted to FERC.

ISO New England’s conclusions would be advisory. The grid operator would not approve, reject or stop a project, and transmission owners would continue to make the final decision about whether and how to proceed. Even so, the findings could provide valuable information for stakeholders reviewing project costs or participating in related regulatory proceedings.

Market implications

In my view, this proposal is a meaningful step forward for the New England market.

The region must continue investing in aging infrastructure, and delaying necessary work could introduce reliability and safety risks. However, the scale of expected spending makes it increasingly important to demonstrate that projects are appropriately scoped, timed and coordinated with the grid’s longer term needs.

The value of independent review is greatest when it occurs before major design and spending decisions become difficult to change. Earlier analysis can help identify reasonable alternatives, prevent unnecessary work and uncover opportunities to coordinate asset replacement with other planned system improvements.

Although ISO New England would not have final authority over these projects, its technical expertise could bring greater consistency to the evaluation process and give stakeholders a stronger basis for understanding how investment decisions are made.

What this means for SmartestEnergy partners and customers

The proposal would not immediately change wholesale energy prices or existing customer contracts. FERC must first review the filing, and the longer term impact will depend on how the process is implemented and how transmission owners respond to ISO New England’s findings.
For SmartestEnergy’s channel partners, this development reinforces the importance of discussing the full range of costs that contribute to a customer’s electricity spend. Commodity pricing is only one part of the overall bill. Transmission investment, capacity requirements and other regulated charges can also affect the total cost of serving load.

A more transparent review process could give partners additional context when discussing regional cost changes with customers. It may also help explain why transmission charges are evolving and how planned infrastructure investments could influence future budgets.

Customers should consider how regulated and passed through charges are treated within their supply agreements, particularly when comparing product structures or developing longer term procurement strategies. Organizations with large loads, multiple facilities or planned expansions may also benefit from monitoring transmission developments as part of their energy budgeting and site planning.

This proposal is another reminder that energy strategy should account for both market prices and the infrastructure required to deliver reliable electricity.

What happens next?
FERC will evaluate whether ISO New England’s proposed tariff changes are just and reasonable. If approved, the permanent asset condition reviewer function is expected to begin in 2027.

The success of the process will depend on the quality of the information available to ISO New England and whether its recommendations are considered early enough to influence project decisions. While the proposal will not resolve every concern surrounding transmission oversight, it could create a more informed and consistent review process for investments that may affect New England customers for years to come.

At SmartestEnergy, we continue to monitor regulatory and market developments across ISO New England to help our partners and customers understand the factors shaping their energy costs and make more informed procurement decisions.